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Addressing Cybersecurity Gaps in Emerging Market Investments -
June 11, 2025
Emerging markets are rapidly becoming the next big opportunity for private equity due to their high growth potential, attractive valuations, and plentiful deals. However, beneath this promise lies a critical risk: cybersecurity vulnerabilities.
Unlike developed markets, many companies in emerging economies face challenges such as outdated digital infrastructure, weak data protection policies, and limited or no cybersecurity training for employees. For private equity firms, these issues represent portfolio-wide risks that can lead to financial losses, reputational damage, and even failed deals.
Key Strategies to Manage Cyber Risk:
- Integrate Cyber Risk into Due Diligence: Assess the target company’s digital maturity early, identify vulnerabilities, and factor in remediation costs when pricing deals.
- Post-Deal Cybersecurity Support: Support portfolio companies by,
- Training teams on cyber best practices
- Upgrading IT systems and security measures
- Developing clear incident response plans
- Leverage Local Expertise: Partner with regional cybersecurity specialists to navigate unique challenges while aligning with global security standards.
In today’s landscape, where data breaches can topple billion-dollar brands, ignoring cyber risk in emerging markets is no longer viable. Firms that proactively address these gaps will gain a competitive edge and lead the market’s future.